Tuesday, March 16, 2010

Financial Peace University - Week 4

Week four was an empowering lesson. It was the debt lesson. Jason and I feel so ready to take on our debts and we now have a plan. The "Debt Snowball". We will send only the minimum on all of our debts except for the smallest one. As we knock out the smaller debts, more money will be free to take on the next lowest debt. Eventually, we will only be paying on our largest debt and we will have more to send them.

I wasn't too sure when I first heard about the debt snowball last year. I thought, shouldn't we focus on the large bill? No! As you knock out smaller debts, your "snowball" grows and gains momentum. By paying off smaller debts first, you are freeing up more money to tackle that large debt and you are also eliminating debt. Eliminating debt is such a motivator. To pay off a debt, no matter how small, is a huge feat! We have one card that will be paid off next month and we are thrilled! The month after that another card should be paid off. See the momentum building?

We were told to attack our debt with "gazelle intesity". What does that mean? It means, go at it with all you have, like a gazelle running from a cheetah:

(image credit)

The metaphor is collectors as the cheetah and us (people with debt) as the gazelle. We need to attack our debt with all that we have before it becomes the end of us. Before we let it get the best of us. We need to fight for freedom from debt!

It was such a great lesson this week and I am so glad to see Jason just as pumped as I am to send all we can spare to pay off our debts!

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